Staying a step ahead
How data sharing collaboration between civil society and the private sector can cut corrupt networks off from the international financial system
The never-ending need for data
It always feels like illicit actors are two steps ahead. Their companies are designed to operate under the radar. They form new companies faster than governments can issue sanctions designations. And if they are designated or have received a little negative press coverage, they adapt, moving their corporate networks into their family members’ names, shuffling ownership structures, or replacing their names on documents with those of proxies.
For financial institutions that are required to end relationships and freeze the assets of those on sanctions lists, these evasion tactics can make it challenging to uphold their obligations. If financial institutions and private companies were to only end relationships when required by government authorities, they’d constantly be behind the curve of real risks to their business. They’d risk being entangled in relationships that might be complicated to end; they’d risk their reputations and the possibility of having to explain to their shareholders why they were engaged in business with now-sanctioned actors.
To identify companies and individuals that might be linked to corrupt officials, war profiteers, or terrorist financiers — and thus be inherently risky — financial institutions and private companies need deep, rich data. Data on the networks facilitating corrupt actors’ activities, the patterns they use to evade detection, and the context in which they are operating is vital to understanding the related money laundering and corruption typologies at play. It is in the best interests of financial institutions and businesses around the world to proactively consider these risks in their decision making, and it’s why so many of them rely on third-party data providers as part of their screening process.
Given the global coverage of these data providers, their databases often only scratch the surface, lacking depth. For instance, they may have a profile for a major politician involved in a corruption scandal, but they may be missing key details such as a list of his companies, family members he’s used as proxies, or identifying details — phone numbers, emails, and ID numbers — that might be used when opening an account.
This is where The Sentry comes in.
Sharing for the common good
Civil society is often the first to reveal acts of corruption and expose the corporate networks of elites. But because it can take years for investigative findings or the work of an advocacy organization to turn into government action, we need a faster mechanism to make these findings actionable.
Sharing deep data from investigations with data providers can be highly impactful, as it bridges possible information gaps, increases the likelihood of more confident screening matches with more data points, and provides more context for risk-related decision making. In most cases, this deep data goes beyond what The Sentry publicly reports. There are meaningful data points that don’t make it onto the page, often to avoid information overload, center a story around key characters, or eliminate extraneous details from narrative storytelling.
Because it can take years for investigative findings or the work of an advocacy organization to turn into government action, we need a faster mechanism to make these findings actionable.
For example, in our reports Overt Affairs and Artful Dodgers, The Sentry exposed a network of North Korean companies operating throughout West and Central Africa that were involved in sanctions evasion and sanctions busting, undertaking public works projects to earn US dollars. These activities undermined international efforts to disrupt the North Korean government’s access to the international financial system, enacted because of the danger that revenue generated overseas could ultimately be used to fund the country’s nuclear weapons program.
After publication in 2020, The Sentry shared with data providers deep data on the 4 companies and 8 individuals involved, including individuals connected to the companies not explicitly named in The Sentry’s reporting. This data, obtained from primary documents reviewed by The Sentry, included identifiers such as dates of birth; ID numbers; company numbers; contact details including email addresses, phone numbers, and addresses; and the names of other linked entities not contained in the reports. Given that we already had evidence these companies and individuals were able to use the international financial system, it was vitally important for banks to proactively look out for these known sanctions busters. Our detailed information allowed banks to be ahead of the curve by almost three years; the entities and individuals named in our reports were sanctioned by the US in March 2023.
By taking proactive action in this way, companies can mitigate not only against sanctions risks, but also against other risks — such as corruption and wildlife trafficking — that are meaningful to their shareholders and their reputations. And when sanctions do come through, there’s less mess to clean up, fewer PR challenges to address, and fewer remediation costs and fines when the shop has been kept tidy from the start.
Data doesn’t need to be complicated
With some simple infrastructure and the right preparation in place, a data sharing partnership can be a low-lift, high-reward activity for investigative outfits and non-profit organizations. What’s more, it doesn’t require highly experienced data talent — the data pipeline can be incredibly simple. The Sentry uses a standardized Excel spreadsheet. No need for a fancy database or complex integrated data system; there are data experts on the other side, and they’ll want to customize and reconfigure the data anyway. The simplicity of a standardized Excel spreadsheet results in easier creation, fewer errors, and a quicker review process that doesn’t require onboarding onto a new technology.
At The Sentry, our process starts by thinking through our investigations with a data mindset. Knowing that we will be sharing data at the end of the investigation lets us not only proactively store data points as we come across them, but also take the extra effort to search for them when they’re nearby. While looking into one company, we might check to see whether the same shareholders have other companies in the same jurisdiction. Or we may stop to look at the identification page for corporate shareholdings to make note of the date of birth of a shareholder.
Establishing an uncomplicated standard workflow makes storing, exporting, and sharing data simple. Oftentimes, investigations involve analyzing primary pieces of evidence that are filled with data points such as contact details, legal personnel, identifiers, and aliases. Storing these data points enables data sharing later on, but it also levels up your own investigation. At The Sentry, we use a neo4j graph database to pivot off these data points to find new connections and identify clusters that might provide insight into new networks. The data is also handy when it comes time to write request for comment letters, providing an opportunity to verify the accuracy of contact details. Our neo4j database then exports neatly into an Excel spreadsheet, and with a few tweaks, we’re ready to share.
By translating our data into an actionable format, it can be added to filters used millions of times a day to make decisions. It’s an extra step that can make a big difference in disabling the multinational predatory networks that benefit from violent conflict, repression, and kleptocracy.
